• Net Sales: Approximately $3 million for the quarter, compared to $3.3 million in the same period last year.
• Gross Margin: Approximately 29% for the quarter, up from 3% in the same period last year.
• Selling, General and Administrative Expenses (SG&A): Approximately $5.6 million, down from $7.8 million in the same period last year.
• Research and Development Expenses (R&D): Approximately $3.8 million, down from $7 million in the same period last year.
• Net Loss: Approximately $14.6 million, with a loss per share of $0.59.
• Cash Used: Approximately $5.5 million net of financing activity for the quarter.

• Warning! GuruFocus has detected 4 Warning Signs with AXDX.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The WAVE system's clinical trial is on track, with external site enrollments meeting expectations and demonstrating strong reliability.
• FDA 510(k) clearance was obtained for the Accelerate Arc system, which is designed to reduce diagnostic turnaround times in clinical settings.
• The company has made significant strides in executing its commercial strategy, focusing on strengthening leadership in the rapid positive blood culture AST market.
• Gross margin improved significantly to 29% from 3% in the same period last year, driven by product mix and an inventory write-down in the prior period.
• Selling, general, and administrative expenses decreased to $5.6 million from $7.8 million in the prior year, reflecting lower employee-related expenses.

Negative Points

• Net sales decreased to approximately $3 million from $3.3 million in the same period last year, driven by lower instrument sales.
• The company reported a net loss of approximately $14.6 million for the quarter, resulting in a loss per share of $0.59.
• Research and development expenses were $3.8 million, down from $7 million in the prior year, indicating reduced investment in development.
• Cash used for the quarter was approximately $5.5 million, highlighting ongoing cash burn despite reductions.
• The company anticipates needing contingent contractual payments to maintain sufficient operating cash through year-end 2025.

Q & A Highlights

Q: Can you discuss the steps required to convert your current Pheno installed base over to WAVE, assuming the clinical trial and approval go as planned? A: John Phillips, President and CEO, explained that the WAVE clinical trial is progressing well, with enrollment on track. The company is actively engaging with current and prospective customers about WAVE, educating them on its functionality compared to Pheno. The transition plan is ongoing, and they expect to convert the majority of existing Pheno customers to WAVE once it is FDA-approved and launched.

Q: Can you talk about the commercial roadmap for Arc and how it will ramp into revenue for 2025 and beyond? A: John Phillips noted that while it's too early to provide financial guidance for Arc, the sales force is fully trained, and marketing plans are in place. There is significant interest in the market, and customer receptivity is high. The value of Arc in automating MALDI and turning it into a rapid ID solution is resonating well with customers.

Q: Could you provide more details on expected cash usage moving forward, particularly for 2025? A: David Patience, CFO, stated that the company aims to maintain a cash burn rate of approximately $5 million per quarter. This target does not include potential financial contributions from Arc, as it is early in the launch. The company is focused on careful cash management while delivering on strategic milestones.

Q: How is the company planning to secure its current customer base and transition them to WAVE? A: John Phillips emphasized that the company has been securing long-term contracts with loyal customers and is actively educating them about WAVE's benefits. The transition plan is well underway, and they anticipate a successful conversion of Pheno customers to WAVE upon its market launch.

Q: What are the key financial highlights from the quarter? A: David Patience reported net sales of approximately $3 million, a decrease from the previous year due to lower instrument sales, but consumable-related product sales increased. The gross margin improved to 29%, and there was a significant reduction in SG&A and R&D expenses. The net loss was approximately $14.6 million, with a cash burn target of $5 million per quarter.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.